What do you mean I'm not covered for flood damage?
Unfortunately that's what millions of homeowners are saying each year
with shock and sometimes horror.
Of course they never thought it could happen to them,
after all they didn't live in a flood zone. But nevertheless they
experienced a record rain storm, sewage backup or county flood control
failure. The good news was know one was injured, the bad news is
they didn't purchase the right flood insurance policy or worse - they
had no policy at all.
To help you avoid this fate, here's the top 10 mistakes
most people make when it comes to buying flood damage insurance.
1. Assuming you need to live near a large body
of water, a flood zone or low lying areas to benefit from flood
insurance.
Most floods are caused by several different causes aside
from living near a large body of water. For example, rain, snow or ice
storms, hurricanes, and water or sewage backup. Add to that any local
dam or county flood control failure which could cause sudden, unplanned
flooding.
2. Assuming your standard home insurance
policy covers flood damage.
This is one of the biggest reasons why it's so important
to stay educated and up-to-date on insurance matters. Why? Because a
recent poll revealed most people still assume they're covered by flood
damage in their standard insurance policy. Surprise! You're not.
The fact is most standard policies don't cover flood or
most water damage. For this you'll need a separate policy or rider.
3. Assuming you can't buy flood insurance if
you've been turned down by traditional insurance companies.
You can buy flood insurance as long as your community
participates in the National Flood Insurance Program.
4. Assuming all flood
insurance is too expensive.
The average flood insurance policy costs as little as
$353 a year for coverage.
5. Assuming Federal Disaster Assistance
will pay for flood damages.
Federal disaster assistance doesn't pay for flood
damages. At best it can help to provide low interest loans if you
qualify - and only if the President declares the area you live in a
disaster.
6. Assuming you don't need flood insurance if
you live in a low to moderate risk area.
Almost 25 percent of all flood insurance claims come
from areas with low-to-moderate flood risk.
7. Assuming you must purchase a full flood
insurance policy.
You may qualify for the Preferred Risk Policy (a
lower-cost flood insurance policy) that provides contents coverage
beginning at $39 per year.
8. Not finding out what's covered by Replacement
Cost and what's covered by Actual Cash Value?
It's important to find this out to make the best
informed decision of what kind of policy to purchase and who to
purchase it from.
9. Assuming you're covered from flood damage if
you rent.
Your landlords policy only insures the building not your
personal property. However, you can purchase an insurance policy for
your personal possessions.
10. Taking The First Policy You Come Across.
The best method of buying the most coverage for the best
price is to comparison shop at least three different companies. You may
be surprised at the price and/or service difference.
By taking the time to follow and remember these 10
guidelines you'll avoid the mistakes many people make when buying flood
damage insurance. You'll also avoid the financial risk of experiencing
flood damage with no coverage.
